Barclays 2014 Annual Report Download - page 254

252 I Barclays PLC Annual Report 2014 barclays.com/annualreport
Independent Auditors’ report
Materiality
The scope of our audit was influenced by our application of materiality.
We set certain quantitative thresholds for materiality. These, together
with qualitative considerations, helped us to determine the scope of
our audit and the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and on
the financial statements as a whole.
Based on our professional judgement, we determined materiality for
the financial statements as a whole as follows:
Overall group materiality £330 million (2013: £310 million).
How we determined it 5% of adjusted profit before taxation excluding cost to achieve Transform. The adjusting items, as defined by
management on page 230 are as follows: own credit, the gain on US Lehman acquisition assets, the provision for PPI
and interest rate hedging redress, the provision for ongoing investigations and litigation relating to Foreign Exchange,
the loss on the announced sale of the Spanish business, the ESHLA valuation revision and goodwill impairment.
Rationale for benchmark
applied
The removal of these items mitigated undue volatility in determining our materiality and provided a more stable
basis of determining materiality, focusing on the underlying profitability of the Group.
We agreed with the Board Audit Committee that we would report to
them misstatements identified during our audit above £15 million
(2013: £15 million) as well as any misstatements below that amount
that, in our view, warranted reporting for qualitative reasons. In
performing our audit we allocated materiality levels to our
components. These are less than the overall group materiality.
Going concern
Under the Listing Rules we are required to review the Directors’
statement, set out on page 73, in relation to going concern. We have
nothing to report having performed our review.
As noted in the Directors’ statement, the Directors have concluded that
it is appropriate to prepare the Group’s and Parent Company’s financial
statements using the going concern basis of accounting. The going
concern basis presumes that the Group and Parent Company have
adequate resources to remain in operation, and that the Directors
intend them to do so, for at least one year from the date the financial
statements were signed. In drawing this conclusion, the Directors have
considered the regulatory capital position of the Group as well as the
funding and liquidity position of the Group.
As part of our audit we have concluded that the Directors’ use of the
going concern basis is appropriate. However, because not all future
events or conditions can be predicted, these statements are not a
guarantee as to the Group’s and the Parent Company’s ability to
continue as a going concern.
Other required reporting
Consistency of other information
Companies Act 2006 opinion
In our opinion, the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are
prepared is consistent with the financial statements.
ISAs (UK & Ireland) reporting
Under ISAs (UK & Ireland) we are required to report to you if, in our opinion:
Exceptions to report
arising from this
responsibility
Q Information in the Annual Report is:
– Materially inconsistent with the information in the audited financial statements; or
– Apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group and Parent
Company acquired in the course of performing our audit; or
– Otherwise misleading.
None
Q The statement given by the Directors on page 73, in accordance with provision C.1.1 of the UK Corporate Governance
Code (‘the Code’), that they consider the Annual Report taken as a whole to be fair, balanced and understandable and
provides the information necessary for members to assess the Group’s and Parent Company’s performance, business
model and strategy is materially inconsistent with our knowledge of the Group and Parent Company acquired in the
course of performing our audit.
None
Q The section of the Annual Report on page 41, as required by provision C.3.8 of the Code, describing the work of the
Board Audit Committee does not appropriately address matters communicated by us to the Board Audit Committee.
None